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Camper van hire insurance : "liability reduction options"...

Sheffield
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Camper van hire insurance : "liability reduction options"...

We were going to hire a campervan in New Zealand, and in fact paid a deposit on a Backpacker Wanderer.

However, we received an E mail pressurising us into paying all sorts of "liability reduction options" and, most worryingly of all, stating that if we didn`t take one of these "liability reduction options" we`d have to leave a 3500 NZD bond on our credit card !

Now we`ve hired cars all over the world, and numerous boats on the canals of the UK, and we`ve never had to leave a huge credit card bond. OK most boatyards, and some car hire firms, try to get more cash out of you for "damage waiver" schemes etc, but they never say they`ll take a huge charge on your credit card if you don`t pay the extra. I used to work in the tool hire industry and damage waiver was always pushed because it`s basically pure profit, so as a rule I never bother with it. Apart from anything else I object to companies advertising one price then trying to add stuff on left right and centre, I feel it`s underhand.

So my questions are :

Are Backpacker the only ones who adopt this policy or are all the other hire firms the same ? And how do they get away with it !

Has anyone had a hire firm try to get money off your credit card bond, fairly or not ?

Edited: 11 October 2011, 19:46
Wellington, New...
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1. Re: Camper van hire insurance : "liability reduction options"...

You will find that when hiring vehicles no two companies are alike. Some will take a swipe of your credit card and hold it until the vehicle is returned undamaged, some will put a hold on your credit card effectively freezing the amount you have left as credit on your card and some will charge the "bond" to your card and refund it after the vehicle is returned. All three are common practices and in most cases that I have come across these conditions are quite clearly spelt out on the Terms and conditions posted on their websites.

The rights and wrongs of each case can be debated but if the terms of the "bond" are clearly spelt out in the Terms and Conditions then the hirer doesnt have too much to grumble about as they have the choice to accept of decline the hire. Very often when one digs deeper into the hire one finds that the hirer in most cases didnt read the Terms and Conditions properly in the first instance.

I would seriously look at the costs of the extra CDW cover and add it to the cost of the hire unless you have adequate travel insurance in place that will cover the costs. One must remember that if one has an accident the hire company is only interested in recovering the due excesses off you and is not concerned about alternate insurance policies. Repair of car accidents in NZ is not cheap especially motor homes.

Hope that helps with your question

Sheffield
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2. Re: Camper van hire insurance : "liability reduction options"...

"You will find that when hiring vehicles no two companies are alike. Some will take a swipe of your credit card and hold it until the vehicle is returned undamaged, some will put a hold on your credit card effectively freezing the amount you have left as credit on your card and some will charge the "bond" to your card and refund it after the vehicle is returned. All three are common practices and in most cases that I have come across these conditions are quite clearly spelt out on the Terms and conditions posted on their websites. The rights and wrongs of each case can be debated but if the terms of the "bond" are clearly spelt out in the Terms and Conditions then the hirer doesnt have too much to grumble about as they have the choice to accept of decline the hire. Very often when one digs deeper into the hire one finds that the hirer in most cases didnt read the Terms and Conditions properly in the first instance. I would seriously look at the costs of the extra CDW cover and add it to the cost of the hire unless you have adequate travel insurance in place that will cover the costs. One must remember that if one has an accident the hire company is only interested in recovering the due excesses off you and is not concerned about alternate insurance policies. Repair of car accidents in NZ is not cheap especially motor homes. Hope that helps with your question."

Thanks for the info.

I still don`t understand why this liability bond on your credit card should only be applied when hiring a camper van in NZ, or maybe elsewhere too, but it`s not asked for when hiring cars or boats (at least in the UK), not on any hires we`ve ever done anyway.

If the liability reduction scheme is so important then they should just include it in the original quoted price, I REALLY hate all this "quote for one thing then add this that and the other on". I feel it`s a bit of a con, the Ryan Air of the vehicle hire world.

On the other hand I really don`t like the idea of effectively giving the hire company 3500 NZD and having to ask for it back again !

I`m so annoyed about it we`re actually thinking of cancelling the hire.

Edited: 12 October 2011, 09:40
Wellington, New...
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3. Re: Camper van hire insurance : "liability reduction options"...

As the customer you have the choice of how you want to proceed. You may wish to check out the major companies Kea, Maui , Britz, Apollo. You may pay a little more but have more peace of mind and their "extras" may be more reasonable. The moral is to check out the Terms and Conditions very carefully especially when dealing on line. If in doubt ask. This applies equally to hiring of cars.

It is not unique to NZ it happens around the world, one just has to do ones homework very thoroughly these days to get the best deal.

Happy motoring

London
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4. Re: Camper van hire insurance : "liability reduction options"...

I know of a couple of Campervan (Motorhome) excess insurance companies based in the UK who offer a worldwide service. Might be an idea contacting Questor http://www.questor-insurance.co.uk/jml and Worlwide Insure www.worldwideinsure.com/WWTswitcher.php…

Hope that helps

Sheffield
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5. Re: Camper van hire insurance : "liability reduction options"...

"I know of a couple of Campervan (Motorhome) excess insurance companies based in the UK who offer a worldwide service. Might be an idea contacting Questor http://www.questor-insurance.co.uk/jml and Worlwide Insure www.worldwideinsure.com/WWTswitcher.php… Hope that helps."

That sounds useful, we`ll investigate.

It`s also been suggested that we may be covered by our travel insurance, we`ll investigate that but somehow I doubt it.......

I`ve since had an E mail from Backpacker stating that Third Party Motor insurance isn`t compulsory in NZ, is that really true ? If so, does anyone know approximately what proportion of drivers out there aren`t covered by motor insurance ? And what happens with all these uninsured drivers if there`s an accident ? ! ?

Auckland, New...
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6. Re: Camper van hire insurance : "liability reduction options"...

Uninsured drivers

Injury to other road users is covered under ACC, so we are "only" talking about property damage.

In NZ we are fully entitled to drive around with no insurance. In fact, if you are a risky driver profile and have little or no assets, it is quite an attractive option. You save the cost of what would be a relatively expensive insurance premium - and you have little or no money to lose in the event that you cause an accident. For those of us with a little more concern for our fellow citizens (or perhaps our own financial record), third party only cover is another option.

But there are plenty of uninsured drivers on the roads, and if they are at fault in accident you will have little or no practical recourse to recover your insurance excess. For that reason, and others, I don't think it is sensible to hire a vehicle with an insurance excess of a few thousand dollars.

Wellington, New...
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7. Re: Camper van hire insurance : "liability reduction options"...

HIkeanddive it appears that you dont have a great deal of experience in hiring motor vehicles. EXcesses on hire motor vehicle is and has always been in the thousands of dollars irrespective of who causes the accident. That is for another day. Most car hire companies have for an extra per diem cost a policy which will reduce the excess to zero or a few hundred dollars. No companies are exactly the same. There is no escaping the excess without taking out the extra insurance.

Should you have accident then the rental company will start by recovering the excess what ever it is. If you are not at fault then you may get a refund at a later date, but then again you not as well. As I have said no two companies are alike.

If you the hirer are not prepared to take out the excess waiver insurance then be prepared for any of the options I spelt out earlier. The hire company as has been siad is not interested in third party insurances that is the hirers lookout.

Insurance is risk aversion and when hiring a car one must weigh up how much risk you as the hirer are prepared to take. If nothing happens then you could come out on the right side of the ledger if you have an accident well ...............................

Most travel insurance policies purchased in NZ have covered up to $5000 payable in NZ dollars. If the exchange rate changes significantly whilst overseas this amount may not cover the excess in local currencty and you would still be out of pocket. To the best of my knowledge rental car excesses in travel insurance policies are paid out in the local currency where the policy is taken out.

How lucky do you feel now.

From a personal perspective I take out the extra coverage for short hires but take the risk on longer hires and rely on my travel insurance for a refund. So far I am ahead.

Auckland, New...
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8. Re: Camper van hire insurance : "liability reduction options"...

Bean, perhaps you didn't quite understand what I was saying in my earlier post. JustinSmith was expressing some surprise that we had uninsured drivers on our roads. We do. Plenty of them.

He also asked what happens if they cause an accident. If they hit you, you will have no recourse in 99% of cases, because they have no money to pay you even if you take them to Court or the Disputes Tribunal.

That means if your rental excess is $2,3,4,5000+ dollars - you will be paying for the accident even though it was the other drivers fault.

For that reason in my view (and I think in yours as well) when you hire a car you should choose one with a lower excess - or buy it down or whatever.

Wellington, New...
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9. Re: Camper van hire insurance : "liability reduction options"...

Sorry if I misunderstood.

Sheffield
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10. Re: Camper van hire insurance : "liability reduction options"...

"Bean, perhaps you didn't quite understand what I was saying in my earlier post. JustinSmith was expressing some surprise that we had uninsured drivers on our roads. We do. Plenty of them. He also asked what happens if they cause an accident. If they hit you, you will have no recourse in 99% of cases, because they have no money to pay you even if you take them to Court or the Disputes Tribunal. That means if your rental excess is $2,3,4,5000+ dollars - you will be paying for the accident even though it was the other drivers fault. For that reason in my view (and I think in yours as well) when you hire a car you should choose one with a lower excess - or buy it down or whatever."

I`m not surprised you have uninsured drivers on your roads, we have a few of them. The difference is that in the UK they`re driving illegally if they`re uninsured. I got the impression it was legal to drive in NZ without insurance. If that is the case I`m amazed.

But what ever the case may be, my point is that the camper van should be insured under the hire agreement. If the insurance cover on the standard hire agreement is so pathetically inadequate, they should increase the cover and put up the price. Otherwise the hire company is just advertising a false price, like so many of the low cost airline are getting into trouble for doing in the UK.

I checked out the excess reduction policies advised above but even they were £8 per day, so, although still a saving, they`re really not worth it for all the additional hassle they`d involve. Let`s remember that £8 a day is nearly £3000 per year ! I pay about £500 a year for my car, and that`s not just an excess reduction policy, that`s the whole policy !

Edited: 15 October 2011, 08:41